HB5264ham001 104TH GENERAL ASSEMBLY

Rep. Elizabeth "Lisa" Hernandez

Filed: 4/14/2026

10400HB5264ham001 LRB104 19654 HLH 36727 a

AMENDMENT TO HOUSE BILL 5264

AMENDMENT NO. ______. Amend House Bill 5264 by replacing everything after the enacting clause with the following:

"Section 5. The Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is amended by adding Section 605-1119 as follows:

(20 ILCS 605/605-1119 new)

Sec. 605-1119. Loans to small businesses impacted by an economic shock.

(a) The Department shall establish a loan program, subject to appropriation, to provide low-interest loans to small businesses that have been negatively impacted by an economic shock. The Department may make loans under this Section from the Economic Recovery Fund, a special fund created in the State treasury. The Department may administer the program directly or through agreements with banks, credit unions, nonprofit loan administrators, or community development financial institutions. The State shall provide a 100% guarantee on loans issued under this Section. Participating lenders shall act as originators and servicers of loans and shall not be required to deploy their own capital.

(b) If the Governor declares that an economic shock exists that has disrupted local or regional businesses and markets, the Department of Commerce and Economic Opportunity shall provide loans to eligible small businesses as provided in this Section. The Governor shall make any determination under this Section based on objective indicators such as:

(1) reduced foot traffic;

(2) declining sales in certain corridors;

(3) workforce disruptions, such as increased absenteeism or job abandonment; and

(4) business closures.

(c) Upon a declaration of an economic shock as provided in subsection (b), a business shall be eligible for a loan under this Section if:

(1) the business employed 50 or fewer persons at any one time in the prior year;

(2) the business's gross receipts in the prior year were $3,000,000 or less;

(3) the business has been materially impacted or is located in an area that has been determined by the Department to be materially impacted by the economic shock.

(d) The loans shall be in an amount determined by the Department but shall not exceed $50,000 per business. The loans shall be repaid by the business at a fixed interest rate of 2%, and the term of repayment shall not exceed 5 years. No repayments shall be required for the first 6 months following disbursement, and no early repayment penalty shall be charged. The loan proceeds shall be used for recovery-related operating expenses including:

(1) rent and mortgage payments;

(2) employee wages and benefits;

(3) inventory restocking;

(4) equipment repair and replacement;

(5) debt repayments incurred to maintain operations;

(6) marketing or customer re-engagement expenses; and

(7) any other cost that the Department may approve by rule.

The Department is authorized to provide participating lenders with an administrative or origination fee, in an amount determined by the Department, to cover the costs of loan origination and servicing. Such a fee may be deducted from loan disbursements.

(e) The Department may adopt rules to administer and enforce this Section and may enter into agreements with banks, credit unions, nonprofit loan administrations, or community development financial institutions. The Department shall establish clear and standardized procedures governing loan servicing, delinquency, and default for loans issued under this Section. Such procedures shall authorize participating lenders to service and manage delinquent loans for a period of time, as determined by the Department by rule, prior to loan closure or write-off.

(f) All interest and principal collected shall be deposited into the Economic Recovery Fund to maintain and replenish lending capacity. Loans issued under this Section shall be backed by the State, and any losses resulting from borrower default shall be borne by the Fund.

(g) Upon a declaration by the Governor that the economic shock has ended, no new loans may be made.

Section 10. The State Finance Act is amended by adding Section 5.1038 as follows:

(30 ILCS 105/5.1038 new)

Sec. 5.1038. The Economic Recovery Fund.

Section 99. Effective date. This Act takes effect upon becoming law.".